While pricing in our overall market has begun to stabilize, interest rates no longer are. Just over the past week, rates have jumped about 1/2 point. Interest rates do have a tendency to move up and down, but considering that the rates have been very stable over the last 6 months, then jump .5% in a week should be concerning for you. If the new norm for rates is going to be 4.25%, then you have missed that much sought after, mystical "bottom" that so many home buyers have been waiting on.
Since January 1, 2012 we have seen far less inventory on the market, less distressed properties available and the ones that are available bringing higher prices, and now, interest rates increasing.
These are all good signs....if you're a home seller. As a home buyer, it really points to your wake up call. If you have been waiting for that best deal and know that home ownership is for you, then it is truly time to take action. It is not wishful thinking by another Realtor, it is proven in the statistics that all experts examine when determining a market.
If you are in the group that still expects pricing to go down some more, then you should get really familiar with the graph that shows how much buying power is lost per upward tick of the interest rate. I can send you copy if you need it. The same $200,000 home became more expensive over the last week by about $1,200 - $1,500 per year due to the rate increase. How long are you willing to gamble that prices will go down another 3% and not have the interest rate offset that decrease??
We are excited to see the increased demand and the market moving toward stabilization. Down the road in a year or so you may even start to see the word "Appreciation" being used again to describe more than how I feel about you for reading my blog!
Have the best day today!
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